Brexit and Employment Law Implications
On 23 June 2016 the United Kingdom voted to leave the European Union by a margin of 3.8%. Brexit is the name given to process of the UK withdrawal from the European Union.
So, what can we expect to happen to employment law in the UK?
Firstly, the referendum is a vote of principle which means it is not technically binding on the Government, although it is ludicrous to think that the ‘leave’ vote would be ignored.
Secondly, the Government will have to negotiate new trading relationships with the EU countries. It is expected that this process will take around two years, so nothing will happen fast. Depending on the results of these negotiations we may continue to be bound by some of the European employment laws, this is because the EU countries would not enter into trade and other agreements with the UK if we were able to undercut them by allowing businesses to employ workers on less demanding and thus terms.
So despite the high level of uncertainty, here are my views on the potential impact of the leave vote on seven key areas of UK Employment Legislation:
The principles of TUPE apply to protect employees on business transfers and in outsourcing/insourcing arrangements. Prior to the reforms to TUPE in 2014, some argued that the UK had created more onerous obligations than the rest of Europe, particularly in relation to service provision changes. Nonetheless public consultation showed that most businesses preferred the certainty that the UK version of TUPE brought, and as a result the UK largely stayed with its gold-plated approach. I do not therefore expect major changes in this area.
- Working Time Regulations
The Working Time Regulations offer a health and safety cushion for workers (for example in the area of night-working), which balances against the need for employers to work long hours. I do not predict a significant reduction in these rights.The 48-hour working week and use of opt-outs is very unpopular and this may be abolished.
Paid holiday will certainly stay, and of course the UK gold-plated the European 4 weeks’ paid annual leave with 5.6 weeks. But I expect to see legislation that will reverse some of the holiday time cases, for example accruing holiday during long-term when sick leave. I also suspect a ‘week’s pay’, which currently includes commission and overtime following ECJ rulings, will be pared back to the position it was a few years ago, with just basic salary being paid as holiday pay.
- Redundancy Consultation
Our 20+ redundancy collective consultation laws stem from an EU Directive. These are unpopular with employers and I suspect will be watered down, for example requiring collective consultation only if over, say, 100 people being made redundant. But I doubt this will be a legislative priority.
- Agency Worker Regulations
These implement the EU Temporary Agency Workers Directive, which requires employers to offer equal terms & benefits to agency workers once they’ve been working for 12 weeks. These are massively unpopular and will probably be repealed. The CBI dislikes them, and unions are hesitant about them as very few temporary workers join unions, so they have no members’ interests to protect.
- Family Friendly
There are unlikely to be any reduction to family friendly rights. We exceed EU rights considerably, for example 52 weeks maternity and shared parental leave.
- Discrimination Laws
The UK already had legislation in place to prohibit sex discrimination, race discrimination and disability discrimination long before Europe required us to do so. We pride ourselves on remaining at the forefront of equality, diversity and above all fairness. It is therefore unlikely that there will be any amendment to the Equality Act 2010.A few years ago, there was a call for discrimination compensation to be capped, as unfair dismissal compensation is capped. At the time that couldn’t be done, because our membership of the EU forbade it. If there is another such call, and we have left Europe, there will be no such impediment.
Perhaps the most likely changes that will occur following the leave vote will be in relation to immigration control and the free movement of labour. These will definitely become tougher, although to what expectant will depend on what our new relationship with the European countries looks like.
In the immediate short term, nothing will change. The withdrawal negotiations are likely to take years, with the status quo largely expected to remain intact during this period. Under the Treaty on European Union, the process for withdrawal can take a maximum of two years, and due to the complexity of the break, it is possible that even this deadline will be exceeded.
In some instances UK employment law exceeds the minimum standards expected of EU employment law (such as maternity rights); in these areas it is unlikely any change will occur. It is more likely that the government will tweak legislation, rather than overhauling it completely. Workers’ protection afforded by TUPE and the Working Time Regulations, for example, has become the norm in UK employment law, and it would be controversial if the government sought to remove such rights completely.
If there is an appetite for change then this is likely to remain a long way off.